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EXHIBIT 10.2
FIRST AMENDMENT TO MOTEL PURCHASE AGREEMENT
THIS FIRST AMENDMENT TO MOTEL PURCHASE AGREEMENT (the
"Amendment") is made as of July 30, 1998, by and among the parties set forth on
the attached Exhibit A (referred to herein individually as "Seller" and
collectively as "Sellers"), and the parties set forth on Exhibit B (referred to
herein individually as "Buyer" and collectively as "Buyers").
W I T N E S S E T H:
WHEREAS, Sellers and Buyers are parties to that certain Motel
Purchase Agreement (the "Agreement") dated as of July 22, 1998; and
WHEREAS, Sellers and Buyers desire to modify and amend the
Agreement in certain respects as set forth herein.
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, Sellers and Buyers
agree as follows:
1. Section 2.3.1 of the Agreement is hereby deleted in its
entirety and the following is substituted in lieu thereof:
2.3.1. Terms. The Purchase Money Loan shall be for a
term of five (5) years from the Closing Date. During the first
twenty-four (24) months subsequent to the Closing Date,
monthly payments of interest only on the outstanding principal
balance of the Purchase Money Notes shall be due thereunder.
On the second anniversary date thereof (the "Amortization
Commencement") the then outstanding principal balance of the
Purchase Money Loan shall be amortized over a 25-year term
with level monthly payments of principal and interest until
the maturity date at which date all principal plus any accrued
but unpaid interest shall be due and payable. Payments on the
Purchase Money Loan shall be subject to adjustment as provided
in Section 2.3.5. Notwithstanding the foregoing, the Purchase
Money Note with respect to the Nashville, Tennessee (Music
Valley Drive) Motel shall mature on March 15, 1999.
2. Section 2.3.2 of the Agreement is hereby deleted in its
entirety and the following is substituted in lieu thereof:
2.3.2. Rate. During the first twelve (12) month
period subsequent to the Closing Date, the Purchase Money Loan
shall bear interest at a rate of 8% (interest only) computed
on the then outstanding principal balance of the Purchase
Money Notes. From and after the first anniversary date of the
Closing Date (the "Initial
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Rate Adjustment Date"), the Purchase Money Notes shall bear
interest at a rate equal to the "Index" plus the Base Rate and
subject to a floor and a ceiling as described herein. For
purposes of this paragraph the Index shall be the spread
between 8 1/2% and the rate on U.S. Treasury bills with five
(5) year maturities on the Initial Rate Adjustment Date. The
"Base Rate" shall be equal to the rate on five (5) year U.S.
Treasury bills on the Initial Rate Adjustment Date. On each
anniversary date of the Initial Rate Adjustment Date, the Base
Rate shall be adjusted to the rate on U.S. Treasury bills with
five (5) year maturities on such date and the monthly payments
during the next twelve (12) month period shall be determined
based upon the then applicable aggregate interest rate over
the remaining amortization period. Notwithstanding anything
contained herein to the contrary, the total interest rate in
any one year shall not be adjusted (up or down) by an amount
greater than 100 basis points nor more than 200 basis points
total from the Initial Rate Adjustment Date to the maturity
date.
3. Section 3.22 of the Agreement is hereby amended by adding
at the end thereof a new Section 3.22.5 as follows:
3.22.5. Consent to Assumption of Bonds. The
applicable Seller shall have received the consent of First
Union National Bank and Wachovia Bank of North Carolina, N.A.
to the assumption by the applicable Buyer of the obligations
of the applicable Seller with respect to the Bonds (as defined
in Section 4.5 hereof) and the granting of the Purchase Money
Mortgages with respect to the Asset Motels financed by the
Bonds as contemplated in this Agreement.
4. Section 4.2 of the Agreement is hereby amended by adding at
the end thereof a new Section 4.2.9 as follows:
4.2.9. Assumption Documents. An assumption by the
applicable Buyer of all obligations of the applicable Seller
relating to the Bonds and the documents executed by the
applicable Buyer in connection therewith.
5. Section 4.5 of the Agreement is hereby deleted in its
entirety and the following is substituted in lieu thereof:
4.5. Bond Financings. The applicable Sellers and the
applicable Buyers acknowledge the existence of certain series
of tax exempt bonds outstanding with respect to the Motels as
disclosed on Schedule 4.5 attached hereto (the "Bonds"). The
applicable Sellers acknowledge the desire of the applicable
Buyers to maintain such tax exempt financing in place and, in
an effort to accomplish this desire, the applicable Sellers
and the applicable Buyers agree as follows:
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4.5.1. Cash Escrow. The Sellers identified
in Schedule 4.5.1 attached hereto shall deliver to
the issuer of the credit enhancement for the
applicable Bonds as escrow agent (each an "Escrow
Agent") immediately available funds on the Closing
Date in the respective amounts as specified on
Schedule 4.5.1. Such amounts shall be held by the
Escrow Agent in escrow pursuant to a separate
agreement for each Asset Motel financed with the
Bonds, such escrow agreements to be entered into at
Closing and to incorporate the applicable provisions
of this Section 4.5. Such funds shall be invested as
directed by mutual agreement of the applicable
Sellers and the applicable Buyers, as specified on
Schedule 4.5.1 hereto, or if they are unable to
agree, in a money market investment, with the
earnings to be disbursed as set forth herein. Such
funds shall not be invested at a yield in excess of
the yield on the applicable Bonds unless an opinion
of Bond Counsel is delivered to the applicable
Sellers stating that investment at a yield in excess
of the yield on the applicable Bonds will not cause
such Bonds to lose their tax exempt status.
4.5.2. Term of Escrow. Except with respect
to disbursements to make principal and interest
payments on the Bonds as described in Section 4.5.3
below and as otherwise provided in Section 4.5.4
below, the funds deposited with the Escrow Agent
pursuant to Section 4.5.1 above shall be held in
escrow until the earlier of (i) March 15, 1999, or
(ii) August 31, 1998 unless on or prior to such date
the applicable Seller, ShoLodge and, if applicable,
Shoney's, Inc., and all of their affiliates, are
released from any and all liability with respect to
such Bonds and the documents executed in connection
therewith, including, without limitation, the
reimbursement obligation to the issuer of the credit
enhancement securing such Bonds, or (iii) the
refinancing of the applicable Bonds so that (A) the
applicable Seller, ShoLodge and, if applicable,
Shoney's Inc., and all their affiliates, have been
released as set forth in part (ii) and (B) either (x)
the Purchase Money Mortgage given with respect to
such Asset Motel is a first priority mortgage lien on
such Asset Motel, or (y) the Purchase Money Note
delivered with respect to such Asset Motel is paid in
full. The applicable Seller and/or ShoLodge shall
have the exclusive right until August 17, 1998 to
obtain the release as contemplated in part (ii) and
part (iii)(A) of the immediately preceding sentence.
In the event that such release has not been obtained
on or before August 17, 1998, the applicable Buyer
shall have the right to attempt to obtain such
release, and, in such regard, the applicable Buyer
shall be entitled to pledge, as security for the new
letter of credit provider, the escrowed funds
referred to in Section 4.5.1. Should such release be
obtained on or before August 31, 1998 in accordance
with part (ii) of the third preceding sentence and
should such Bonds be
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refinanced in accordance with part (iii) of the third
preceding sentence on or before March 15, 1999, the
then remaining principal portion of the funds held in
escrow with respect to such Asset Motel and all
undisbursed investment earnings thereon shall be
disbursed to the Buyer reflected on Schedule 4.5.1.
In the event that such release is not obtained on or
before August 31, 1998 in accordance with part (ii)
of the fourth preceding sentence or in the event that
such refinancing of the applicable Bonds does not
occur in accordance with part (iii) of the fourth
preceding sentence on or before March 15, 1999, the
remaining principal portion of the escrow funds with
respect to such Asset Motel and all undisbursed
investment earnings thereon shall be disbursed
directly to the trustee for the applicable Bonds for
the redemption and payment in full the principal of,
and interest on, such Bonds on the earliest
redemption date thereafter or, if applicable, to the
issuer of any credit enhancement securing such Bonds
to reimburse such issuer for the payment of the
principal of, and interest on, such Bonds made by
such credit enhancer. All interest due and payable
upon the redemption of such Bonds and not paid from
the disbursement of investment earnings described in
the preceding sentence shall be paid by the
applicable Buyer. Any remaining undisbursed
investment earnings after payment in full of such
Bonds shall be disbursed to the applicable Buyer. For
purposes of this Section 4.5.2, "release" shall not
mean the release of any breach of a representation or
warranty then in existence or any then existing
default with respect to a non-monetary obligation.
4.5.3. Principal and Interest Payments. On
the dates as specified in Schedule 4.5.3, an amount
from the escrowed funds as specified in Schedule
4.5.3 shall be disbursed to the trustee for the
applicable Bonds to pay principal payments required
to be made by the applicable Buyer on the Bonds as
specified on such schedule or, if applicable, to the
issuer of any credit enhancement securing such Bonds
to reimburse such issuer for the payment of the
principal of such Bonds made by such credit enhancer.
On each interest payment date with respect to the
Bonds, undisbursed investment earnings shall be
disbursed to the trustee for the applicable Bonds to
pay interest payments required to be made by the
applicable Buyer on the Bonds on such interest
payment date or, if applicable, to the issuer of any
credit enhancement securing such Bonds to reimburse
such issuer for the payment of the interest of such
Bonds made by such credit enhancer. Each applicable
Buyer shall have the right to make directly to the
trustee and/or the credit enhancer payments of
principal or interest on any principal or interest
payment date, in which case the applicable Buyer
shall receive reimbursement from the principal
portion of the escrowed funds or
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undisbursed investment earnings thereon, as
applicable. For purposes of this Section 4.5,
interest shall include letter of credit and
remarketing fees.
4.5.4. Default. Should the applicable Buyer
default in its obligation to make interest payments
on the Bonds and should such default continue for ten
(10) days, the applicable Seller, at its option, may
direct that the remaining principal portion of the
escrow funds and all undisbursed investment earnings
thereon shall be disbursed directly to the trustee
for the Bonds for the redemption and payment in full
of the principal of, and interest on, the Bonds on
the earliest redemption date thereafter or, if
applicable, to the issuer of the credit enhancement
for the Bonds to reimburse such credit enhancer for
the payment of the principal of, and interest on, the
Bonds made by such credit enhancer. All interest due
and payable upon the redemption of the Bonds and not
paid from the disbursement of investment earnings as
described in the preceding sentence shall be paid by
the applicable Buyer. Any remaining undisbursed
investment earnings after payment in full of such
Bonds shall be disbursed to the applicable Buyer.
4.5.5. Assumption of Obligations. The
applicable Buyers shall assume all obligations of the
applicable Sellers with respect to the Bonds and all
documents executed in connection thereof, including
the reimbursement obligation to the issuer of the
credit enhancement securing such Bonds. In connection
with the assumption of the Bonds, ShoLodge and/or the
applicable Sellers represent to the applicable Buyers
that (i) to their best knowledge, there is not an
event of default in existence with respect to the
documents evidencing, securing or governing the Bonds
and no event which would, but for the passage of time
or provision of notice or both constitute an event of
default under such documents. ShoLodge and the
applicable Sellers agree to indemnify and hold the
applicable Buyers harmless from and against any loss,
damage, liability or expense paid or incurred by the
applicable Buyers as a result of any existing breach
of any obligation, undertaking, representation or
warranty by the applicable Seller and/or ShoLodge
under the terms and conditions of any of the
documents or agreements evidencing, securing or
governing the Bonds. Further, ShoLodge and/or the
applicable Sellers acknowledge and agree that certain
of the obligations of the applicable Sellers and/or
ShoLodge under such documents can, by their nature,
only be performed or observed by ShoLodge and/or the
applicable Sellers, including, without limitation,
the obligations under those certain reimbursement
agreements entered into by and between the bank
providing the letter of credit insuring the Bonds and
ShoLodge, and ShoLodge and/or the applicable Sellers
agree to continue to perform or observe such
obligations until such time as the credit enhancement
securing the Bonds has been released or terminated.
The applicable Buyers shall receive a credit from the
applicable Sellers for all
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interest which has accrued but has not yet been paid
with respect to such Bonds, and all interest which
becomes due and payable after Closing shall be paid
by the applicable Buyers. The applicable Sellers
shall receive a credit for all fees paid in advance
with respect to such Bonds after giving effect to the
proration of such fees between the applicable Buyers
and the applicable Sellers until the Closing Date.
4.5.6. Costs. All costs and expenses
incurred in maintaining the Bonds, including, without
limitation, the cost of providing opinions of bond
counsel and the cost of the attorneys for Sellers in
preparing the assumption and escrow documents as
described herein (but not to exceed $7,500) and the
fees and expenses payable to the issuers of the
credit enhancement securing such Bonds to obtain
their consent to the transactions contemplated in
this Section 4.5, and all costs and expenses related
to the refinancing of such Bonds shall be paid by the
applicable Buyers. No such fees and expenses payable
to such issuers of credit enhancement shall be
incurred without the prior written approval of the
applicable Buyer.
4.5.7. Economic Benefit. In the event that
the Bonds, or any portion thereof, are refinanced as
contemplated in this Section 4.5, the "economic
benefit" (as hereinafter defined) of such refinancing
shall be shared one-half (1/2) by the applicable
Sellers as identified on Schedule 4.5.1 and one-half
(1/2) by the applicable Buyers as identified on
Schedule 4.5.2. The "economic benefit" shall be an
amount calculated by multiplying the outstanding
principal amount of the indebtedness or portion
thereof which refinances the Bonds as contemplated in
this Section 4.5 by a percentage equal to the
difference between the interest rate on the
indebtedness or portion thereof which refinances the
Bonds as contemplated in this Section 4.5 and nine
percent (9%). The economic benefit shall be split as
described herein for the period from the date of such
refinancing until the date the indebtedness which
refinances such Bonds (or if applicable, any
subsequent refinancing or refinancings thereof) is
paid in full. The economic benefit payable to the
applicable Sellers as identified on Schedule 4.5.1
shall be paid by the applicable Buyers as identified
on Schedule 4.5.1 monthly in arrears, but the
applicable Buyers shall first be entitled to recoup,
equally out of each party's portion of the economic
benefit, the amount of all costs and expenses
incurred in maintaining the Bonds and in refinancing
the same. The applicable Buyers shall provide the
applicable Sellers an itemized breakdown of all such
costs and expenses immediately upon the closing of
any such refinancing of the Bonds contemplated
herein.
6. The Agreement is hereby amended by deleting the page
attached thereto entitled "SCHEDULES AND EXHIBITS" and substituting in lieu
thereof such page attached to this Amendment.
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7. The Agreement is hereby amended by attaching thereto
Schedule 4.5.1 and Schedule 4.5.3 attached to this Amendment.
8. Except as hereby modified and amended, the Agreement shall
continue in full force and effect.
(signatures on following pages)
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Dated as of the date set forth above.
SELLERS: BUYERS:
-------- -------
MOBAT, Inc., a Tennessee corporation Capitol Lithia Springs, LLC, an Ohio
limited liability company
By: Capitol Realty I, LLC, its Managing
By: /s/ Xxx Marloew Member
-----------------------------------
Its: Secretary
----------------------------------- By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxx, a Member
Delaware Inns, Inc., a Tennessee
corporation
Capitol Newark, LLC, an Ohio limited
liability company
By: /s/ Xxxx Xxxxx
----------------------------------- By: Capitol Realty I, LLC, its Managing
Its: President Member
-----------------------------------
By: /s/ Xxxxxxx X. Xxxxxx
Carolina Inns, Inc., a Tennessee -----------------------------------
corporation Xxxxxxx X. Xxxxxx, a Member
By: /s/ Xxxx Xxxxx Capitol Greensboro, LLC, an Ohio limited
----------------------------------- liability company
Its: President
----------------------------------- By: Capitol Realty I, LLC, its Managing
Member
Shoney's Inn, Inc., a Tennessee
corporation By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxx, a Member
By: /s/ Xxxx Xxxxx
-----------------------------------
Its: President
-----------------------------------
Sunshine Inns, Inc., a Tennessee
corporation
By: /s/ Xxxx Xxxxx
-----------------------------------
Its: President
-----------------------------------
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Shoney's Inn of Independence, a Tennessee Capitol Gallatin, LLC, an Ohio limited
general partnership liability company
By: Two Seventeen, Inc., a Tennessee By: Capitol Realty I, LLC, its Managing
corporation, a general partner Member
By: /s/ Xxxx Xxxxx
----------------------------------- By: /s/ Xxxxxxx X. Xxxxxx
Its: President -----------------------------------
----------------------------------- Xxxxxxx X. Xxxxxx, a Member
By: Inn Partners, Inc., a Tennessee
corporation, a general partner Capitol Pensacola, LLC, an Ohio limited
liability company
By: /s/ Xxxx Xxxxx
----------------------------------- By: Capitol Realty I, LLC, its Managing
Its: President Member
-----------------------------------
By: /s/ Xxxxxxx X. Xxxxxx
LAFLA Inn, Inc., a Tennessee corporation -----------------------------------
Xxxxxxx X. Xxxxxx, a Member
By: /s/ Xxxx Xxxxx
----------------------------------- Capitol Tallahassee, LLC, an Ohio limited
Its: President liability company
-----------------------------------
By: Capitol Realty I, LLC, its Managing
Member
Alabama Lodging Corporation, a
Tennessee corporation
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
By: /s/ Xxxx Xxxxx Xxxxxxx X. Xxxxxx, a Member
-----------------------------------
Its: President
----------------------------------- Capitol Independence, LLC, an Ohio
limited liability company
Xxxxxxxxxx Hotel Associates, Ltd., a By: Capitol Realty I, LLC, its Managing
Tennessee limited partnership Member
By: Inn Partners, Inc., a Tennessee
corporation, a general partner By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
By: /s/ Xxxx Xxxxx Xxxxxxx X. Xxxxxx, a Member
-----------------------------------
Its: President
-----------------------------------
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By: ShoLodge, Inc., a Tennessee Capitol Lafayette, LLC, an Ohio limited
corporation, a general partner liability company
By: /s/ Xxxx Xxxxx By: Capitol Realty I, LLC, its Managing
----------------------------------- Member
Its: President
-----------------------------------
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Shoney's Inn of Baton Rouge, a Tennessee Xxxxxxx X. Xxxxxx, a Member
general partnership
By: Two Seventeen, Inc., a Tennessee Capitol Tuscaloosa, LLC, an Ohio limited
corporation, a general partner liability company
By: /s/ Xxxx Xxxxx By: Capitol Realty I, LLC, its Managing
----------------------------------- Member
Its: President
-----------------------------------
By: /s/ Xxxxxxx X. Xxxxxx
By: Inn Partners, Inc., a Tennessee -----------------------------------
corporation, a general partner Xxxxxxx X. Xxxxxx, a Member
By: /s/ Xxxx Xxxxx
----------------------------------- Capitol Xxxxxxxxxx, LLC, an Ohio
Its: President limited liability company
-----------------------------------
By: Capitol Realty I, LLC, its Managing
Member
Shoney's Inns of New Orleans, Ltd., a
Tennessee limited partnership
By: /s/ Xxxxxxx X. Xxxxxx
By: ShoLodge, Inc., a Tennessee -----------------------------------
corporation, Managing General Xxxxxxx X. Xxxxxx, a Member
Partner
By: /s/ Xxxx Xxxxx Capitol Baton Rouge, LLC, an Ohio
----------------------------------- limited liability company
Its: President
----------------------------------- By: Capitol Realty I, LLC, its Managing
Member
Shoney's Inn of Music Valley, Ltd., a
Tennessee limited partnership By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
By: ShoLodge, Inc., a Tennessee Xxxxxxx X. Xxxxxx, a Member
corporation, its only general partner
By: /s/ Xxxx Xxxxx
-----------------------------------
Its: President
-----------------------------------
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Shoney's Inn of Bossier City, Ltd., a Capitol New Orleans, LLC, an Ohio
Tennessee limited partnership limited liability company
By: ShoLodge, Inc., a Tennessee By: Capitol Realty I, LLC, its Managing
corporation, Managing General Member
Partner
By: /s/ Xxxx Xxxxx By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------- -----------------------------------
Its: President Xxxxxxx X. Xxxxxx, a Member
-----------------------------------
Capitol Music Valley, LLC, an Ohio
ShoLodge, Inc., a Tennessee corporation limited liability company
By: /s/ Xxxx Xxxxx By: Capitol Realty I, LLC, its Managing
----------------------------------- Member
Its: President
-----------------------------------
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxx, a Member
Capitol Bossier City, LLC, an Ohio limited
liability company
By: Capitol Realty I, LLC, its Managing
Member
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxx, a Member
CAPITOL MURJACK, Inc., an Ohio
corporation
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Its: President
-----------------------------------
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SCHEDULES AND EXHIBITS
Schedule 1.1.a. Real Property Legal Descriptions
Schedule 1.1.b. List of Ground Leases (Seller as Lessee), identified by Property
Schedule 1.1.c. Leases (Seller as Lessor), identified by Property
Schedule 1.3 Asset Motels (14 properties)
Schedule 1.4 Stock Sale Motels (2 properties)
Schedule 2 Allocation of Purchase Price and Purchase Money Loan
Schedule 4.1.22 Franchise License Agreement - Royalty fee as percentage of gross sales
Schedule 4.5 Outstanding Tax Exempt Bonds/Bond Financing
Schedule 4.5.1. Cash Escrow
Schedule 4.5.3 Bond Principal Payments
Schedule 8.4 List of all Motel Contracts, identified by Property
Schedule 8.5 Personal Property and Operating Equipment subject to or secured by
security agreement(s) of any kind and manner
Schedule 8.26 Stock Sale Company Loans - Equipment Financings
Schedule 8.26.1 Stock Sale, Contingent Contracts and Agreements
Schedule 8.27 Employee Benefit Plans (Group IV and MURJAC)
Schedule 10.1 Improvements
Schedule 12 Employees not rehired by Buyer
EXHIBIT A Sellers
EXHIBIT B Buyers
